Types of Pay Schedules: Weekly, Bi-Weekly, Semi-Monthly & More

The four types of pay schedules used by most employers are weekly, bi-weekly, semi-monthly, and monthly. There are benefits and drawbacks to each, including how the pay periods align with your accounting needs or insurance premiums to the time and cost to run payroll. Explore the differences between each of the types of payroll schedules — and a few key factors to consider — to optimize the payroll process and make an informed decision for your company.

What’s the Difference Between a Pay Schedule and a Pay Period?

Also known as “pay frequency,” a pay period is a length of time in between each paycheck that your employees receive for their work. Your pay schedule combines a set pay period cadence (weekly, bi-weekly, etc.) with specific pay dates (Friday 5/17, Friday, 5/24, etc.). Whereas the pay period decides how often an employee receives a paycheck, the pay schedule determines which actual pay days and dates those checks will be received.

It is possible — and common — for the end date of a pay period and the actual pay date to be different. Pay dates will often occur the following week. As an example: A weekly pay period may run from Thursday 5/9 through Wednesday 5/15. The actual pay date for that period might not occur until Friday 5/17.

Semi-monthly vs. Bi-weekly Payroll

The difference between bi-weekly and semi-monthly pay schedules is subtle, but significant. Bi-weekly payroll sets a two-week pay period. Semi-monthly sets a pay period two times each month (generally the 1st and 15th or perhaps the 1st and 30th). On the surface, both types of payroll would seem to run twice a month. However, because there are not exactly 4 weeks in a month, there ends up being two additional pay periods per year in a bi-weekly pay schedule than there are in a semi-monthly one (26 vs. 24). 

This means that in two months of each year, there will be three bi-weekly pay dates within the same month. It also means that pay dates always occur at the same time of month in each month of a semi-monthly schedule, but it will vary in each month of a bi-weekly one.

The Four Common Types of Pay Schedules: Pros & Cons

Key Factors to Consider Before Deciding Your Pay Schedule

Your pay schedule will have a direct impact on the complexity of your accounting, total overhead costs, employee satisfaction, and employee retention. Organizations must not forget to consider these impactful factors when making a final decision:

• Legal Requirements: Laws about payroll schedules vary by state. You should check with legal counsel to see if your state sets a minimum pay frequency.

• Accounting Requirements: Don’t forget that federal law requires overtime rates to be calculated each week, regardless of your pay schedule. If you have employees that work overtime, this can make a semi-monthly schedule more complex.

• Total Business Costs: Ensure that you can afford the cost of running payroll at the frequency that you set.

• Payroll Deductions: Important benefit deductions such as health insurance and workers’ compensation insurance may have required premium payments that are charged once per month. The employer and employee must both understand how and when these deductions will be made.

These factors and others may play into your decision. There are also other irregular pay structures companies may use beyond these four, such as commission-based pay or piece-rate pay. Consult with your legal team before making any final decisions.

Running payroll, regardless of your pay schedule, can require a lot of time and effort — especially for companies with small HR departments. If you have more questions about how payroll processing works, don’t hesitate to speak with an SPLI account executive.

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